Goncalves retirement from the steel sector brings to an
end a career that spanned more than three decades and multiple
continents, and witnessed numerous changes in an evolving
Goncalves, who exited his post
as chairman, president and chief executive officer of Metals
USA Holdings Corp. after its April 12 purchase by Reliance
Steel & Aluminum Co., worked in the steel sector for 32
years, including 15 years as a chief executive, and is
satisfied with what he achieved over the course his career, he
told AMM in an interview.
Goncalves career began in
Brazil when he joined Cia Siderurgica Nacional (CSN) right out
of college in 1981, starting in the basic oxygen furnace shop
and gradually moving downstream through continuous casting, hot
rolling, cold rolling and coating. He was then given an
additional role managing sales as well as production, a
promotion he attributed to his characteristic outspokenness. "I
was critical of the way my company sold steel," he said. "I got
the job because I kept complaining."
Then Vale SAs chief
executive officer, who also ran CSN, asked him to run
California Steel Industries Inc. (CSI), he said. It was
supposed to be a one-year assignment, after which he was to
return to Brazil, but he came to love the United States and
didnt return to his homeland.
"Two years became four and four
promised to become eight. CSI was profitable," he said. But in
the fifth year, bankers representing shareholders of newly
restructured Metals USA came to Goncalves with a proposal. He
After Metals USA exited
bankruptcy in 2002, Goncalves listed it first on the American
Stock Exchange and then Nasdaq, and inside of two years its
share price went from $3 to $20 apiece, he said.
Given the cyclicality of the
business, he said, the only way to lock in those gains was to
take the company private, so at that point he brought in Apollo
Global Management LLC, which bought the service center chain
for $22 per share in 2005. Shareholders were paid several
dividends over the next five years and the company went public
again in April 2010. "Now we sold it to Reliance," he said.
Los Angeles-based Reliance
completed its previously announced purchase of Metals USA for
$1.24 billion, comprising $20.65 per share ($786 million) in
cash for shareholders and the assumption of $454 million in
amm.com, April 15).
Goncalves said his biggest
accomplishment with Metals USA was to develop real teamwork
among branches that once were small, independent distributors
before being rolled up into a conglomerate in the late
"We do not dissipate energy with
infighting. In the first year, I replaced the entire top
management. We identified great talent within and promoted
managers. We became a single entity. Our ability to cooperate
is second to none," Goncalves said. Metals USA succeeded
because "our one-plus-one made much more than two."
Looking forward, the steel
industrys challenge through the next decade is to
identify burgeoning demand and match that with the correct
amount of capacity, he said. "There is always something that
motivates the market. But now, China is maturing. Business is
shrinking in Europe and in the United States," and developing
countries cannot offset lower global consumption.
"I think the only place for
another growth spurt is Africa. People dont realize it
exists. But we need that," Goncalves said. "People talk about
global overcapacity, but what we have is under-consumption. The
steel industry is based on volume. No volume equals problems.
We need to keep consumption growing."